The House of Representatives has initiated an investigation into widespread abuses of tax incentives and waivers allegedly costing the federal government N8 trillion in lost revenue. The decision followed a renewed motion by Oluwole Oke, representing Oriade/Obokun Federal Constituency, during Thursday’s plenary session.
Oke emphasized that while tax incentives serve as legitimate tools to stimulate economic growth, systemic exploitation by companies and mismanagement by authorities have created severe fiscal leakages. He revealed that Nigeria loses approximately N6 trillion annually to firms manipulating the system and an additional N2 trillion through poorly administered waivers.
The lawmaker specifically identified capital allowances, pioneer status incentives, free trade zone exemptions, and VAT waivers as the most abused provisions. He warned that Nigeria’s 10.6% tax-to-GDP ratio – among Africa’s lowest – reflects these structural weaknesses, with potential to trigger Venezuela-style economic collapse if unaddressed.
Originally proposed in July 2023, the motion’s revival indicates stalled progress on prior legislative efforts to curb revenue losses. The House has now tasked its Committees on Finance, Industry, and Commerce with conducting a comprehensive audit of all tax expenditures and submitting findings within four weeks.
This probe coincides with the federal government’s push to widen its tax base amid mounting debt servicing obligations and declining oil revenues. Analysts suggest the investigation could lead to tighter oversight of incentive programs and possible prosecution of fraudulent beneficiaries.
